{"id":735,"date":"2020-08-15T18:30:00","date_gmt":"2020-08-15T18:30:00","guid":{"rendered":"http:\/\/heathertankersley.com\/2020\/?p=735"},"modified":"2020-12-29T11:43:22","modified_gmt":"2020-12-29T11:43:22","slug":"offering-over-appraisal","status":"publish","type":"post","link":"https:\/\/heathertankersley.com\/blog\/offering-over-appraisal\/","title":{"rendered":"Offering Over Appraisal"},"content":{"rendered":"\n

The real estate market is still going strong in the Central Texas area and good homes are going under contract in a matter of days, if not faster!<\/p>\n\n\n\n

For example, last weekend, I put a \u201cComing Soon\u201d sign in the front yard of a listing that was coming up soon to generate some interest while they were hosting their moving sale. We got 3 offers before we\u2019d event taken care of minor repairs and staged the home.<\/p>\n\n\n\n

The offer we ultimately accepted was $30,000 OVER asking price and the buyers waived their appraisal contingency.<\/p>\n\n\n\n

In other words, they were going to buy the house for that price regardless of what it appraised for.<\/p>\n\n\n\n

Sounds crazy, right? <\/p>\n\n\n\n

Over appraisal is not uncommon.<\/p>\n\n\n\n

You might be surprised to find out this is not at all uncommon right now…<\/p>\n\n\n\n

Friends of mine just paid $860,000 for home that the sellers were asking $835,000 for. Same sort of terms.  <\/p>\n\n\n\n

Another client of mine listed her home for $229,000 and we had a contract signed within 24 hours at $240,000. <\/p>\n\n\n\n

So, it\u2019s not as wild as you might think, but there are some real things to consider when making your offers.<\/p>\n\n\n\n

But the question is… should YOU offer more than the asking price when you\u2019re ready to make an offer?<\/p>\n\n\n\n

And to borrow my attorney friend\u2019s phrase: \u201cIt depends\u201d. <\/p>\n\n\n\n

You see, every situation is unique and depends on your particular situation.<\/p>\n\n\n\n

And let\u2019s also keep in mind, paying over \u201casking\u201d is not necessarily the same as paying over appraisal.<\/p>\n\n\n\n

For example, if we run the numbers and are reasonably confident the home will appraise at our offer, even if it\u2019s over asking price, then I have less of a concern about that. But, if we feel the property is already at the top of the market, we have to realize that it may not appraise.<\/p>\n\n\n\n

When that happens, things get a little trickier.<\/p>\n\n\n\n

\"over<\/figure>\n\n\n\n

So, what happens next… 

<\/strong>Here are the options we have… <\/p>\n\n\n\n

1. Dispute the appraisal. <\/strong>This depends largely on the property, comparables, and the actual appraiser. I have had cases where the appraiser has come up $40,000 (on a $400,000 home) and other situations where the appraiser won\u2019t budge even though he used a comp that was 2 miles away across from a mobile home park with a pool (and ours didn\u2019t have a pool). So it\u2019s worth a shot, but it\u2019s definitely not a gaurantee.<\/p>\n\n\n\n

2. Negotiate the price with the seller.<\/strong> The thing is… the seller has already started counting their profits and are pretty well dug in on the offer amount even IF the home appraises reasonably close to the asking price, but below the offer. <\/p>\n\n\n\n

Yet, the buyer doesn\u2019t want (or doesn\u2019t have the money) to pay any more out of pocket.<\/p>\n\n\n\n

Often the seller will agree to reduce the price some, but only if the buyer pays a portion over the appraised value. In other words, if the offer was $450,000 and it appraised at $430,000, the seller may be willing to come down to $440,000 if the buyer is willing to pay $10,000 out of pocket. <\/p>\n\n\n\n

3. Walk away. <\/strong>Sometimes, this is the only option. The seller won\u2019t budge and the buyer either can\u2019t or won\u2019t come up above the appraisal. <\/p>\n\n\n\n

There\u2019s a lot more to this, of course when we\u2019re going through our purchase strategy and where you want to come in with your offer… We always run the numbers, confirm where the agent is getting his\/her numbers if it\u2019s a trickier home to value, and decide just how much you want this particular home and what your tolerance is. <\/p>\n\n\n\n

NOTE: Offering asking price (or less) doesn\u2019t necessarily mean it will appraise!<\/p>\n\n\n\n

It\u2019s a good idea for us to have this conversation BEFORE we start looking at homes so that we can plan our strategy accordingly and make sure that we\u2019re looking at the right homes for your particular situation. <\/p>\n\n\n\n

\"\"<\/figure><\/div>\n\n\n\n

Until next time… keep smiling\u2026 be kind\u2026 and stay safe out there \ud83d\ude42<\/p>\n\n\n\n

P.S. And be sure to follow me<\/a> on \"fb Facebook<\/a> and \"instagram Instagram <\/a>so I can share market information, renovation and design tips, information about things to do in the Austin area, and more! <\/p>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

The real estate market is still going strong in the Central Texas area and good homes are going under contract in…<\/p>\n","protected":false},"author":1,"featured_media":736,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0},"categories":[24],"tags":[23,21,22],"yoast_head":"\nOffering Over Appraisal - heathertankersley<\/title>\n<meta name=\"description\" content=\"Over appraisal is the valuation of the building based on its current and projected cash flows may lead to an overappraisal of the property.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"http:\/\/heathertankersley.com\/blog\/offering-over-appraisal\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Offering Over Appraisal - 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